Desjardins to buy three businesses from Guardian Capital

Desjardins and Guardian Capital Group have entered into definitive agreements for Desjardins to acquire Guardian’s life insurance, mutual fund and investment distribution networks. Specifically, Desjardins will acquire:

• IDC Worldsource Insurance Network Inc., one of the largest life insurance managing general agencies in Canada
• Worldsource Financial Management Inc., a mutual fund dealer
• Worldsource Securities Inc., a full-service investment dealer

IDC, WFM and WSI serve more than 5,000 independent advisors in the Canadian insurance and financial advice markets.

The acquisition will position Desjardins as a leader in the independent distribution of life insurance and retail investment products in Canada, with more than $2 billion in life insurance premiums in force and $43 billion in combined assets under administration in mutual funds, segregated funds and securities, as at June 30, 2022.

The purchase price under the Purchase Agreements is $750 million, subject to customary purchase price adjustments, a portion of which will be distributed to minority shareholders of IDC. In addition to the proceeds expected to be received under the transaction, Guardian has a portfolio valued at $648 million, as at its last quarter end of September 30th, 2022.

As a result of this acquisition, Desjardins will accelerate its growth strategy for the broader Canadian market, a key focus for the organization in recent years. The acquisition of State Farm’s Canadian operations in 2015 positioned Desjardins as the second largest P&C insurer in the country. More recently, the partnership with Canada’s five provincial credit union centrals and CUMIS in 2017 created Aviso Wealth, which administers and manages over $100 billion in assets and is now one of the largest independent wealth management firms in the country.

The transaction is expected to close in the first quarter of 2023 and is subject to customary closing conditions, including regulatory approvals. A copy of the Purchase Agreements will be made available under Guardian’s SEDAR profile.

Following the closing of the transaction, Desjardins plans to operate the acquired companies as stand-alone entities, and expects them to continue being led by the current teams of management and employees. The companies will continue supporting advisors’ core beliefs to maintain independence with respect to open architecture for products and solutions.

“This acquisition strengthens Desjardins in the important life insurance and wealth management sectors across Canada. On the insurance side, it extends our market reach and positions us as a leader in life insurance independent distribution in Canada. On the financial advisory side, the mutual fund and securities dealers will enhance and strengthen our distribution of retail investment products. With this added bench strength, Desjardins will be able to serve more Canadians and achieve critical mass to generate the financial flexibility to innovate and invest to better meet the needs of our members, clients and advisors. All three acquired companies align with Desjardins’ values and commitment to win the trust of members and clients and will continue building on their outstanding growth serving clients through the independent advisor channel. We look forward to welcoming the leaders, employees and advisors and supporting their continued impressive success going forward.” – Guy Cormier, president and CEO of Desjardins Group.

“We are proud of the quality of wealth businesses we have built. Our success has been made possible by remaining patient and building long standing trusted relationships between advisors and our company. This was all made possible due to the strong leadership and collaborative efforts of our dedicated executive team, employees and advisors”. He further noted, “At the same time, we take great comfort in having Desjardins succeed us as owners of these businesses. Desjardins has the vision, resources and long-term commitment to offer the employees and advisors an environment to thrive and reach even greater levels of success. This transaction unlocks meaningful value for Guardian’s shareholders, while simultaneously streamlining its operations to focus on its core investment management business. We look forward to continuing to build best in class investment solutions for investors and growing our diverse investment management business across all client segments, including institutional, retail, and private wealth.” – George Mavroudis, president and CEO of Guardian.